Delhi-NCR and Mumbai Witness Significant Drop in New Office Space Supply
Delhi-NCR and Mumbai, two of India's most prominent real estate markets, have experienced a notable decline in the new supply of office spaces over the past year. According to data from Colliers India, the new supply of office space in Delhi-NCR fell by 15%, while Mumbai saw a more substantial 37% drop. This trend has occurred despite a strong demand for prime workspaces from both domestic and overseas companies.
Real estate consultant Colliers India reported that the demand for office spaces has outpaced the new supply in 2025 across India’s seven major cities: Bengaluru, Delhi-NCR, Mumbai, Hyderabad, Chennai, Pune, and Kolkata. This imbalance has led to a reduction in vacancy levels, making it increasingly competitive for businesses to secure prime office space.
The technology sector and the BFSI (Banking, Financial Services, and Insurance) industry are the primary drivers of office demand in India. Additionally, foreign firms looking to establish Global Capability Centres (GCCs) in India are contributing to the increased demand for high-quality office spaces.
Colliers India's latest data reveals that the new supply of office space in Delhi-NCR decreased to 7.4 million square feet last year from 8.7 million square feet in the 2024 calendar year. This decline is particularly significant given the region's importance as a hub for IT and BFSI companies.
In Mumbai, the reduction in new office supply is even more pronounced. The city, known for its financial and corporate presence, saw a 37% drop in new office space supply. This decline can be attributed to various factors, including regulatory hurdles, construction delays, and a shift in developer focus towards other property types such as residential and retail.
Despite these challenges, the demand for office spaces remains robust. Technology firms, driven by the growing digital economy, continue to expand their operations in these cities. BFSI companies are also investing heavily in modern office spaces to attract and retain top talent. Foreign firms, on the other hand, are establishing GCCs to leverage India's skilled workforce and cost advantages.
The imbalance between supply and demand has led to a tightening of the market, with vacancy rates falling and rental prices potentially rising. This scenario presents both challenges and opportunities for real estate developers and businesses. Developers may need to expedite their projects to meet the growing demand, while businesses may need to be more strategic in their property acquisitions and lease negotiations.
In conclusion, while the new supply of office spaces in Delhi-NCR and Mumbai has declined, the demand from various sectors remains strong. This dynamic market environment is likely to shape the future of real estate in these cities, influencing development strategies and business decisions.
